Catch Up at the Micro-Level: Evidence from an Industry Case Study Using Manufacturing Census Data

In this paper we provide a first attempt to analyse catch up at the micro level, not possible in conventional macro-studies. The Indonesian pulp and paper industry has been selected as case-study because it experienced spectacular investment and growth, becoming one of the world’s largest exporters and producers of paper in the world. We apply stochastic frontier analysis to compare technical efficiency of Indonesian paper mills with Finnish plants, which can be considered as the world technological leaders in the industry. The analysis is performed on a pooled dataset based on manufacturing census data for the period 1975-1997. In the paper we address the following questions: What is the distribution of Indonesian plant performance vis-à-vis the technological frontier? What is the role of entry, exit and survival on catch up? And, what are the characteristics of catching-up plants. Although we find that on average the Indonesian paper industry has closed the gap with the technology frontier during the 1990s, catch up has been a highly localised process in which only a few large establishments have achieved near best-practice performance, while most other plants have stayed behind.

Technological spillovers from multinational presence - Towards a conceptual framework

This paper undertakes a critical review of existing spillover analyses and proposes a unique analytical framework for examining technological spillovers in a manufacturing industry setting. The proposed framework overlaps three different literature strands; cluster and network dynamics, technological innovations; and spillover literature. It enables determination of the extent to which multinational presence in a host country stimulates spillover occurrence to local firms as well as their nature. Using this framework, the kind and the channels through which spillovers occur most can be equally determined - this is particularly relevant for policy intervention in a technically backward country. Lastly, it allows determination of factors and conditions under which spillovers from multinationals occur.International Economic Relations, Technology Transfer, Learning, Network Dynamics, Capability Building, Technological Change, Multinational Enterprises

The Micro-Dynamics of Catch Up in Indonesian Paper Manufacturing: An International Comparison of Plant-Level Performance

In this study we analyze the micro-dynamics of catch up in Indonesian paper manufacturing using a two-country plant-level data set for the period 1975-1997. The Indonesian paper industry is selected as a case-study because it experienced spectacular investment and growth. It became one of the world's largest exporters and producers of paper in the world. We apply Data Envelopment Analysis (DEA) to compare the technical efficiency of Indonesian paper mills with that of Finnish mills, which are considered to be the world technological leaders in paper making. We address three questions: What is the distribution of Indonesian plant performance vis-à-vis the technological frontier? What is the role of entry, exit and survival for catch up? What are the characteristics of catching-up plants? We find that on average the Indonesian paper industry moved closer to the technological frontier during the 1990s. However, catch up has been a highly localized process in which only a few large establishments have achieved near best-practice performance, while most other plants have stayed behindeconomic development, economic growth, technological change, paper industry, Indonesia

Late industrialisation and structural change: the Indonesian experience

industrialisation, structural, change, Indonesia

Industrial Policy and Technology Diffusion: Evidence from Paper Making Machinery in Indonesia

technology diffusion, Indonesia

Technical and marketing support systems for successful small and medium-size enterprises in four countries

Studies of successful and medium-size enterprises (SMEs) and their marketing and technical support systems were undertaken for Colombia, Indonesia, Japan, and the Republic of Korea. Three to four subsectors were examined in each country. The sample worldwide amounted to 445 firms. Mechanisms to support export marketing varied across countries and subsectors. How they varied depended greatly on whether SMEs operated within well-developed private networks. When market penetration begins, transaction costs are high and collective marketing support can be important. As markets"thicken,"initiatives by foreign buyers become more important. Generally the most effective collective marketing support was of the kind that can be provided more effectively by decentralized organizations - such as industry associations or local governments and chambers of commerce (support firms'participation in trade fairs, for example) - than by central government institutions. Private mechanisms were more important than collective mechanisms for helping firms improve their technological capability. Demand for collective mechanisms tended to be greater when technological requirements of production were complex or when the endowments of private technological networks in certain countries or industries were weak. Broad-based collective technical support facilitates the emergence of an information-rich environment for firms, and may be worth pursuing in many settings. Examples of such support include: 1) sponsoring courses in specialized topics; 2) facilitating the use of expert consultants (either directly, by making a consultant available to a broad array of firms, or indirectly, by providing financial support for the use of consultants); and 3) promoting information-sharing among firms. Countries that already have strong broad-based collective support and that are moving into technologically more advanced activities might consider"high-intensity"support, but should proceed with caution.Microfinance,Small and Medium Size Enterprises,Small Scale Enterprise,Markets and Market Access,Water Conservation,Microfinance,Private Participation in Infrastructure,Small Scale Enterprise,Access to Markets,Markets and Market Access

Trade and Investment Liberalization Effects on SME Development: A Literature Review and a Case Study of Indonesia

As this research seeks to bring to the fore benefits that have been or may be derived for SMEs from international trade and investment liberalization in Indonesia, it has three main questions: (1). how international trade and investment policy reforms affect local SMEs; (2) has growth of exports of SMEs accelerated since the reforms; and (3) does investment liberalization generate more subcontracting between local SMEs and FDI.?Trade and Investment, SME, Indonesia

History friendly simulations for modelling industrial dynamics

simulation, models, industrial dynamics

Strengthening Cluster Building in Developing Country alongside the Triple Helix: Challenge for Indonesian Clusters - A Case Study of the Java Region

This paper is a component of my conceptual foundation paper due to PhD field work in Indonesia to understand the possibility and the chance for developing country such as Indonesia to strengthen cluster building alongside The Triple Helix model within the region of Java. This paper is a conceptual paper based on case study in Indonesia related to the Triple Helix and cluster approach for chosen Industrial Clusters in Java. In this paper, the focus will be on six selected industrial clusters across the Java region. They are Gresik Industrial District in East Java, Tugu Wijaya Semarang in Central Java, Sentul Bogor in West Java, Jababeka in Bekasi, Kujang Industrial District, and Kawasan Berikat Nusantara in Jakarta. In conjunction with the fact in Indonesian industrial condition, Indonesian government initiated the setting up of industrial district which later known as 2 industrial cluster to make existence easier for both domestic and international investors by providing all necessary infrastructure, facilities and housing in one safe location - at a reasonable cost - thus providing a secure base for industry and manufacturing. Regarding clustering approach, Indonesia has a very long tradition of SMEs (Small and Medium Sized Enterprises) cluster around similar activities. In 2002, the cluster comprised approximately 3700 firms mostly SMEs employing 58.000 permanent workers (Loebis and Schmitz, 2005). They are usually craft industries and export oriented driven. About 70% of the cluster production is exported while the rest is sold on the domestic markets. However, little is known about the critical success factors that determine economic development of cities and regions and empirical studies that draw lessons for policy are scarce (Tichy, 1998), specifically for implementing cluster approach in industry/manufacturing sector in Indonesia. Moreover, there are good reasons to doubt to what extent a purely sectoral view is adequate to analyse region economic growth and to design policies. There are many indications that urban economic growth increasingly seems to emerge from fruitful cooperation between economic actors, who form innovative networks. It is in these geographically concentrated network configurations, or ‘cluster’ that value-added and employment growth in urban regions is realised. This demands a new policy approach in urban economic development, specifically for Indonesian study. Accordingly, it is motivating to investigate the process of cluster building in industrial district in Java region as the important region due to economic, social, and political condition. Thus, details can be read in the following section within this paper.Cluster, Triple Helix, SMEs,